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Standard on Internal Audit (SIA) 1

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1 Standard on Internal Audit (SIA) 1

2 Planning an Internal Audit
Objectives of Planning Use of Internal Audit Factors affecting Planning Process Scope of Planning Factors affecting scope of Internal Audit. Planning process

3 Objective of Planning Internal audit plan is a document defining the scope, coverage and resources, including time, required for an internal audit over a defined period. Objectives include: suggest improvements to the functioning of the entity. strengthen the overall governance mechanism of the entity

4 Use of Internal Audit Understand, assess and evaluate the risks and adequacies of the prevalent internal controls. Identifying areas for systems improvement Ensuring optimum utilization of the resources Ensuring proper and timely identification of liabilities Ensuring compliance with internal/ external guidelines Safeguarding the assets of the entity Reviewing and ensuring adequacy of information systems security and control. Reviewing and ensuring adequacy, relevance, reliability and timeliness of management information system.

5 Factors affecting Planning Process
Objectives of the activity and significant risks associated with the same. The risk management and internal control system instituted in the organization. Selection of engagement team. Business/Industry developments. Changes in the financial reporting framework

6 Scope of Planning Knowledge of the legal and regulatory framework
Knowledge of the entity’s accounting, internal control systems and policies Determining the effectiveness of the internal control procedures Determining the nature, timing and extent of procedures to be performed Identifying the activities warranting special focus Allocation of staff to different activities. Setting the time budget for each of the activities Identifying the reporting responsibilities

7 Factors affecting scope of Internal Audit
Terms of the engagement Nature of accounting system and Accounting policies adopted. Nature of information technology system used by the client Authorization and delegation of authority in the systems environment The nature of management information system in vogue and Expected audit coverage Materiality thresholds established in respect of various areas of audit Nature and extent of audit evidence to be obtained Experience and skills of the staff Requirements of the applicable pronouncements of the ICAI. Statutory or regulatory framework in which the entity operates

8 Planning Process Obtaining Knowledge of the Business
Establishing the Audit Universe Establishing the Objectives of the Engagement Establishing the Scope of the Engagement Deciding the Resource Allocation Preparation of Audit Programme

9 Standard on Internal Audit (SIA) 2

10 Basic Principles Governing Internal Audit
Integrity, Objectivity and Independence Confidentiality Due Professional Care , Skills and Competence Work performed by Others and Documentation Planning Evidence Internal Control; and Risk Management System Reporting

11 Integrity, Objectivity and Independence
Straightforward, honest and sincere in his approach to his professional work Maintain an impartial attitude Immediately bring any actual or apparent conflict of interest to the attention of the appropriate level of management Confidentiality Maintain the confidentiality of the information acquired in the course of his work

12 Due Professional Care , Skills and Competence
Due professional Care to be applied: In Deciding the extent of work required to achieve the objectives of the engagement. In assessment of risk management Control and governance processes and Cost benefit analysis. Obtain skills and competence through general education, technical knowledge through study and formal courses.

13 Work Performed by Others
Direct, supervise and review the work delegated to assistants. No reasons to believe that he should not have relied on the work of the expert Responsible for forming his opinion on the areas/ processes being subject to internal audit or his findings. Documentation Document matters, providing evidence that the audit was carried out in accordance with the Standards on Internal Audit

14 Planning Obtain knowledge of the legal and regulatory framework
Obtain knowledge of the entity’s accounting and internal control systems. Determining the effectiveness of the internal control procedures. Identifying the activities warranting special focus Setting the time budget for each of the activities Identifying the reporting responsibilities Benchmark the actual results of the activities.

15 Internal Control and Risk Management Systems
Obtain an understanding of the risk management and internal control framework. Perform steps for assessing the adequacy. Review the adequacy. Perform risk-based audits on the basis of risk assessment process. Evidence: obtain appropriate evidence to draw reasonable conclusions. Reporting: Review and assess the conclusions drawn from the evidence obtained and suggest remedial action

16 Standard on Internal Audit (SIA) 3

17 Documentation Reviewer Use of documentation
Factors affecting Documentation Matters to be Documented Identification of Preparer and Reviewer Exceptional Circumstances Document Retention and Access

18 REVIEWER Reviewer means an Individual who has:
reasonable knowledge and experience of internal audit processes reasonable knowledge of SIAs, other relevant pronouncements of the Institute. reasonable understanding of the business environment in which the entity operates reasonable understanding of internal audit issues relevant to the entity’s industry

19 Use of Documentation Enables an experienced internal auditor, having no previous connection with the internal audit to understand: The nature, timing and extent of the audit procedures performed. The results of the audit procedures and the audit evidence obtained. Significant matters arising during the audit and the conclusions reached thereon. Terms and conditions of an internal audit engagement, scope of work, reporting requirements, any other special conditions, affecting the internal audit.

20 Factors affecting Documentation
The nature and extent of the audit procedures to be performed The identified risks of material misstatement The extent of judgment required in performing the work. The significance of the audit evidence obtained. The nature and extent of exceptions identified. The need to document a conclusion or the basis for a conclusion. The audit methodology and tools used.

21 Matters to be Documented
Engagement letter or the internal audit charter Internal audit plan and programme, Chart of the organizational structure and Progress report, MIS report. Analytical procedures performed and results thereof Copies of significant contracts and agreements Internal review reports Evaluation questionnaires, checklists, flowcharts Certification and representations obtained from management Results of risk and internal control assessments

22 Identification of Preparer and Reviewer
Who performed that task and the date such work was completed. Who reviewed the task performed and the date and extent of such review. Reasons for creating particular internal audit documentation. Source of the information contained in the internal audit documentation and Any cross referencing to any other internal audit documentation The preparers and reviewers of the internal audit documentation should also sign the workings. The internal audit file should be assembled within sixty days after the signing of the internal audit report.

23 Exceptional Circumstances
The details of circumstances encountered along with the documentary evidence. The new or additional audit procedures performed, audit evidence obtained, and conclusions reached and When and by whom the resulting changes to the audit documentation were made, and reviewed.

24 Document Retention and Access
Formulate policies for custody and retention. Ownership of audit documents. Access to Third party. Retention of Documents.

25 Standard on Internal Audit (SIA) 4

26 Reporting Contents of the SIA Introduction
Basic Elements of Internal Audit Report Communication to Management Limitation on Scope Restriction on Usage and Report Circulation Otherwise Than to the List of Intended Recipients

27 Introduction and Basic Elements of an Internal Audit Report
To establish standards on the form and content of the internal auditor’s report. Basic Elements of an Audit Report Title Addressee Report Distribution List Period of coverage of the Report Opening or introductory paragraph, Objectives & scope Paragraph Executive Summary Observations, findings and recommendations Comments from the local management and Action Taken Report Date, Place, Signature with membership number of the Internal Auditor.

28 Communication to Management
Communication with the management to ensure that the recommendations in the final report are practical. The stages of communication and discussion should be as under : Discussion Draft Exit Meeting Formal Draft Final Report

29 Limitation on scope and Restriction on Usage and Report Circulation
When there is a limitation on the scope of the work, the report should describe the limitation. Restriction on Usage and Report Circulation Otherwise Than to the List of Intended Recipients The Report should contain: It should be used for intended purpose only as agreed upon. The circulation of the Report should be limited to the recipients mentioned in the Report Distribution List.

30 Standard on Internal Audit (SIA) 5

31 Sampling Contents of the SIA Introduction Definitions
Use of Sampling in Risk Assessment Procedures and Tests of Controls Design of the Sample Sample Size Statistical and Non-Statistical Approaches Selection of the Sample Evaluation of Sample Results Documentation

32 Introduction ,Definition and Use of Sampling
To establish standards on the design and selection of an audit sample and provide guidance on the use of audit sampling. The SIA defines the following Audit Sampling Error Population Sampling Risk Sampling Unit Statistical Sampling Tolerable Error Use of sampling in Risk Assessment and tests of control To obtain an understanding of the entity, business and its environment, and its internal control. Sampling of tests of controls is appropriate when application of the control leaves audit evidence of performance Risk can be reduced by increasing sample size for both tests of controls and tests of details.

33 Design and size of the sample and Statistical and non Statistical Approaches
Design of the sample The sample should be designed considering the specific audit objectives, the population from which the auditor wishes to sample, and the sample size Sample Size Should be determined considering sampling risk, the tolerable error, and the expected error. Lower the risk, greater the sample size. Statistical and Non-Statistical Approaches Decision of using either statistical or non-statistical sampling is a matter of the internal auditor’s professional judgment. When applying statistical sampling, sample size may be ascertained using either probability theory or professional judgment.

34 Selection & Evaluation of Sample
Selection of Sample It should be selected in such a way that the sample can be expected to be representative of the population. Commonly used sampling methods are: Random selection and use of CAAT’s Systematic Selection Haphazard Selection Evaluation of Sample Results The auditor should: Analyse the nature and cause of any errors detected in the sample. Project the errors found in the sample to the population. Reassess the sampling risk. Consider their possible effect on the particular internal audit objective. Evaluate the sample results to determine if the assessment of the relevant characteristics of the population is confirmed or not.

35 Documentation The documentation includes: Relationship between the design of the sample and specific audit objectives. Assessment of the expected rate of error in the population to be tested. Assessment of the sampling risk and the tolerable error Assessment of the nature and cause of errors. Rationale for using a particular sampling technique and results thereof. Analysis of the nature an cause of any errors detected in the sample. Projection of the errors found in the sample to the population Reassessment of sampling risk, where appropriate Effect of the sample results on the internal audit’s objective.

36 Standard on Internal Audit (SIA) 6

37 Analytical Procedures
Contents of the SIA Introduction. Nature and Purpose. Analytical Procedures as Risk Assessment Procedures and in Planning the Internal Audit. Analytical Procedures as Substantive Procedures. Analytical Procedures in the Overall Review at the End of the Internal Audit. Extent of Reliance on Analytical Procedures Investigating Unusual Items or Trends.

38 Introduction, Nature and Purpose
To apply analytical procedures as the risk assessment procedures at the planning and overall review stages of the internal audit. Nature and Purpose Analytical procedures include the consideration of comparisons of the entity's financial and non-financial information. In determining the extent to which the analytical procedures should be used, the following factors have to be considered Significance of the area being examined. Adequacy of the system of internal control. Availability and reliability of financial and non-financial information. Precision with which the results of analytical procedures can be predicted. Availability and comparability of information regarding the industry in which the organization operates. Extent to which other auditing procedures provide support for audit results.

39 Analytical Procedures as Risk Assessment Procedures and as Substantive Procedures
Analytical Procedures as Risk Assessment Procedures and in Planning the Internal Audit. To obtain an understanding of the business, the entity and its environment and in identifying areas of potential risk. Planning the internal audit for use both financial and non-financial information Analytical Procedures as Substantive Procedures To reduce detection risk relating to specific financial statement assertions and assertions relating to process. Inquire with the management as to the availability and reliability of information needed to apply analytical procedures.

40 Analytical Procedures in the Overall Review at the End of audit, Extent of reliance and Investigating Unusual Items or Trends Analytical procedure should be applied at or near the end of the internal audit when forming an overall conclusion. Extent of Reliance on Analytical Procedures is based on the following factors Materiality of the items involved. Internal audit procedures directed toward the same internal audit objectives. Accuracy with which the expected results of analytical procedures can be predicted. Assessments of inherent and control risks. Investigating Unusual Items or Trends When analytical procedures identify significant fluctuations or When relationships that are inconsistent with other relevant information or Data that deviate from predicted amounts. The internal auditor should investigate and obtain adequate explanations and appropriate corroborative evidence.

41 Standard on Internal Audit (SIA) 7

42 Quality Assurance in Internal Audit
Introduction Scope and Objective In House Internal Audit Quality Review

43 Internal Audit Independent management function.
Continuous and critical appraisal of the entity Suggest improvements and strengthen the overall governance mechanism of the entity. Provides assurance that there is transparency in reporting, as a part of good governance.

44 Scope and Objective Applicable whenever an internal audit is carried.
Whether by internal audit department or external firm of Professional accountants. Objective: To Establish standards and provide guidance To Ensure Compliance with professional standards, regulatory and legal requirements. To Improve functionalities of the organization, Transparency in reporting and good governance.

45 In House Internal Audit
Leadership responsibilities for quality in internal audit Ethical requirements Acceptance and continuance of client relationship and specific engagement Human resources Engagement performance Monitoring

46 Quality Review Internal Quality Reviews Internal Quality Reviewer
Communicating the results of Internal Quality Reviews External Quality Reviews External Quality Reviewer Communicating the results of External Quality Reviews

47 Standard on Internal Audit (SIA) 8

48 Terms of Internal Audit Engagement
Introduction Elements of Terms of Engagement Withdrawal from Engagement

49 Introduction Agree on the terms of the engagement before commencement of Audit. The agreed terms would need to be recorded in an engagement letter. The responsibility of the internal auditor to prepare the engagement letter. To be signed both by the internal auditors as well as the auditee. Approval by Board of Directors/ Audit Committee. Periodic review and modification of Terms of Engagement.

50 Elements of Terms of Engagement
Scope Responsibility Authority Confidentiality Limitations Reporting Compensation Compliance with Standards

51 Withdrawal from Engagement
If unable to agree to any change in the terms or is not permitted to continue as per the original terms, then auditor should withdraw from the engagement. Consider whether there is an obligation, contractual or otherwise, to report the withdrawal to other parties.

52 Standard on Internal Audit (SIA) 9

53 Communication with Management
Introduction Matters to be communicated. Communication Process Documentation

54 Introduction Provides a framework for matters to be communicated with the management. Internal auditor should consider the following: Communicate clearly the responsibilities, scope and timing of Audit. Obtain relevant Information Provide timely observations Promote effective two way communication.

55 Matters to be Communicated
Planned scope and Timing of Internal Audit Significant findings from the Internal Audit Stages of Communication: Discussion Draft Exit Meeting Formal Draft Final Report

56 Communication Process
Establishing the communication Process Forms of Communication Timing of Communication Adequacy of the Communication Process

57 Documentation In case of Oral communication the internal auditor shall document, when and to whom they were communicated. In case of Written communication the auditor shall retain a copy of the communication as part of the internal audit documentation.

58 Standard on Internal Audit (SIA) 10

59 Internal Audit Evidence
Introduction and Objective Audit Evidence Categories of Documentary Evidence Modes of obtaining Audit Evidence

60 Introduction and Objective
Scope and coverage are much broader than Statutory Audit. Covers comments on internal control systems, risk management, propriety aspect of transactions. This Standard deals with the qualitative and quantitative aspects of evidence in internal audit.

61 Audit Evidence Internal audit evidence is persuasive rather than conclusive in nature The internal auditor may obtain evidence on a selective basis by way of judgmental or statistical sampling procedures The internal auditor’s judgement is usually influenced by: The materiality of the item. The type of information available. Degree of risk of misstatement.

62 Categories of Documentary Evidence:
Documentary evidence originating from and held by third parties. Documentary evidence originating from third parties and held by the entity. Documentary evidence originating from the entity and held by third parties and Documentary evidence originating from and held by entity.

63 Modes of obtaining Audit Evidence
Inspection Observation Inquiry and confirmation Computation Analytical review

64 Standard on Internal Audit (sia) 11

65 Consideration of Fraud in an Internal Audit
Introduction Objectives of Internal Control System Elements of Internal Control System Responsibilities of Internal Auditor

66 Introduction Fraud is defined as an intentional act by one or more individuals among management, those charged with governance, or third parties, involving the use of deception to obtain unjust or illegal advantage. The primary responsibility for prevention and detection of frauds rests with management and those charged with governance

67 Objectives of Internal Control System
Internal control refers to the process designed, implemented and maintained by the management of the entity to ensure accomplishment of its following objectives: Reliability of financial reporting. Efficiency and effectiveness in operations. Compliance with applicable laws and regulations. Safeguarding of assets.

68 Elements of Internal Control System
The control environment. Entity’s risk assessment process. Information system and communication. Control activities. Monitoring of controls.

69 Responsibilities of Internal Auditor
Control Environment Risk Assessment Information system and communication Control Activities Monitoring Communication of Fraud Documentation

70 Standard on Internal Audit (SIA) 12

71 Internal Control Evaluation
Introduction Factors reflected in the Control Environment Inherent Limitations of Internal Controls Role of Internal Auditor Areas to be Reviewed by Internal Auditor. Areas of Evaluation Controls present in a System Driven Environment Tests of Control Communication of Internal Control Weakness Disclosure

72 Introduction Establish Standards and provide guidance on procedures to be followed by Internal Auditor Communication of weakness in Internal control. Internal control system consists of interrelated components such as Risk assessment, Control (or Operating) environment, Monitoring, etc.

73 Control Environment Factors reflected in the control Environment:
Entity organization Structure Functioning of BOD/ Governing Body. Management's philosophy and operating style Management's control system. Integrity and ethical values Commitment to competence Human resource policies and practices

74 Inherent Limitations of Internal Controls
Cost benefit Analysis Potentiality for Human Error Circumvention of Internal controls by parties within/ outside the entity. Misuse of Power Manipulations by Management.

75 Role of Internal Auditor
Evaluation of the efficiency and effectiveness of controls Recommending new controls where needed – or discontinuing unnecessary controls Using control frameworks Developing control self-assessment

76 Areas of Review for Internal Auditor
Mission, vision, ethical and organizational value-system of the entity Personnel allocation, appraisal system, and development policies Accounting and financial reporting policies and compliance with applicable legal and regulatory standards Objective of measurement and key performance indicators Documentation standards Risk management structure Operational framework Processes and procedures followed Degree of management supervision Information systems, communication channels Business Continuity and Disaster Recovery Procedures

77 Evaluation of Internal Control
Verify mission statement and written goals and objectives. Assessing risks at the entity level. Assessing risks at the activity (or process) level. Prepare Business Control Worksheet. Ensure all risks to the entity are identified. Ascertain those risks for which no controls exist or existing controls are inadequate.

78 System Driven Environment
Determine whether the entity uses: Encryption tools, protocols to protect confidential or sensitive information. Back-up and restore features to reduce the risk of permanent loss of data. Virus protection software and Passwords that restrict user access to networks, data and applications.

79 Tests of Control Performed to obtain effectiveness of the:
Design of the internal control systems.  Operation of the internal controls throughout the period. Cost Benefit analysis. Includes Inspection of Documents, Inquiries and Observation, Re-performance , Reconciliations and Testing of Internal Controls.

80 Communication of Internal Control Weakness
In case of continuing internal control weaknesses, consider whether: Management has increased supervision and monitoring; Additional or compensating controls have been instituted; and/or Management accepts the risk inherent with the control weakness.

81 Disclosure The internal auditor in his report to the management, should provide: A description of the significant deficiency or material weakness in internal control. His opinion on the possible effect of such weakness on the entity’s control environment.

82 Standard on Internal Audit (SIA) 13

83 Enterprise Risk Management
Introduction Process of ERM and Internal Audit Scope Maturity of ERM structure Disclosure

84 Introduction ERM enables management: To effectively deal with risk
Associated uncertainty and enhancing the capacity to build value to the entity Types of Risks: Strategic Operational Financial and Knowledge

85 Process of ERM Enterprise Risk Management is a structured, consistent and continuous process of measuring or assessing risk and developing strategies to manage risk within the risk appetite. Process consists of Risk identification, prioritization and reporting, Risk mitigation, Risk monitoring and assurance.

86 Scope of Internal Auditor’s Work
Risk maturity level Compliance with the risk management policy In case of the risks covered by the internal audit plan: Assess the efficiency and effectiveness of the risk response. Assess whether the score of the residual risk is within the risk appetite

87 Maturity of ERM Structure
Protects the enterprise against surprises Stabilizes overall performance with less volatile earnings Operates within established risk appetite Protects ability of the enterprise to attend to its core business and Creates a system to proactively manage risks.

88 Disclosure Assurance rating (segregated into High, Medium or Low) as a result of the review Tests conducted Samples covered and Observations and recommendations.


Matters to Consider Planning Nature of Risks Reliability of ICS Review of IT Environment

91 Matters to Consider The extent to which the IT environment is used
The flow of authorised, correct and complete data to the processing centre. •The processing, analysis and reporting tasks undertaken in the installation and •The impact of computer-based accounting system on the audit trail.

92 Planning Information Technology Infrastructure
Significance and complexity of computerised processing Determination of the organisational structure. Determination of the availability of data

93 Nature of Risks Lack of transaction trails
Uniform processing of transactions Lack of segregation of functions Potential for errors and irregularities Initiation or execution of transactions Dependence of other controls over computer processing Potential for increased management supervision Potential for the use of CAAT.

94 Reliability of ICS Authorised, correct and complete data is made available for processing. Timely detection and correction of errors Interruption in the working of the IT environment . Accuracy and completeness of output. Adequate data security Unauthorised amendments to the programs Safe custody of source code of application software and data files.

95 Review of IT Environment
System Audit reports Reports of system breaches Reports of network failures/ virus attacks and threats to perimeter security. General controls Application controls Business Continuity Planning, Crisis Management, Disaster Recovery Procedures.


Introduction Acquiring Knowledge of the Entity Source of Information Using the Knowledge

98 Introduction What constitutes the knowledge of an entity’s business.
Importance to the various phases of an internal audit engagement . Techniques to be adopted in acquiring such knowledge. Identify appropriate, reliable and useful information

99 Acquiring Knowledge of the Entity
Relevant industry, regulatory, and other external factors. Nature of the entity and its Business operations. Investment, Financing activities and Financial reporting. Accounting policies, Business risk, objectives and strategies of the entity.

100 Source of Information Previous engagement experience
Business plan/organisational structure and Internal documentation produced by the entity. Incorporation documents and Visits to the entity premises. Discussion with key management persons, statutory auditors, Suppliers, customers and third party agencies. Publications related to the industry.

101 Using the Knowledge Assessing risks and identifying key focus areas.
Planning and performing the internal audit effectively and efficiently. Evaluating audit evidence. Providing better quality of service to the client The information obtained should be adequately documented.


Introduction Need to use work of Expert Skills and Competence of Expert Evaluating the work of an Expert Disclosure

104 Introduction An expert is a person, firm or other association of persons possessing special skill, expertise, knowledge and experience in a particular field. Use expert if internal Audit Team does not possess the required knowledge. If Expert is engaged by the senior management or those charged with governance.

105 Need to use work of Expert
Factors to be Considered: Materiality of the item being examined. Nature and complexity of the transaction. Risk of error. Extent of Internal audit evidence available.

106 Skills and Competence of Expert
The expert’s professional qualifications or membership in an appropriate professional body.  The reputation of the expert in the relevant discipline. The knowledge and specific experience of the expert in the industry to which the auditee entity operates.

107 Evaluating the work of an Expert
The objectives and scope of the work Access to records, personnel and physical properties. The ownership and custody of engagement documentation and working papers. Confidentiality of the expert's work Expert’s relationship with the auditee Confidentiality of the auditee’s information used by the expert. Verify the source data used, assumptions made and methods used in obtaining the result.

108 Disclosure Normally work of an expert is not required to be disclosed.
Disclose the work if it is beneficial to the reader after obtaining Prior consent of Expert. Outline the assumptions, broad methodology and conclusions of the expert.

109 Standard on Internal Audit (SIA) 17

110 Consideration of Laws and Regulations in an Internal Audit
Scope and Objective. Responsibility of Management Responsibility of Internal Auditor Types of Laws and Regulations Compliance with Laws and Regulations. Audit procedures in case of Non Compliance identified. Reporting of non compliance

111 Scope To consider laws and regulations when performing an internal audit. To test and report on compliance with specific laws or regulations. Non compliance- Acts of omission or commission by the entity, either intentional or unintentional, which are contrary to the prevailing laws or regulations. Non-compliance does not include personal misconduct by those charged with governance, management or employees of the entity.

112 Objective To obtain sufficient appropriate audit evidence
To perform specified audit procedures To respond appropriately to non-compliance or suspected non-compliance

113 Responsibility of Management
To ensure compliance with the provisions of laws and regulations This can be achieved by assigning appropriate responsibilities to the following: • A compliance committee A audit committee.

114 Responsibility of Internal Auditor
Should not assume any accountability for risk management decisions taken by the management. Inherent limitations on the internal auditor’s ability to detect non-compliance: To many laws and regulations Non-compliance may involve conduct designed to conceal it Legal determination by a court of law.

115 Types of Laws and Regulations
Laws and regulations having direct effect on Financial Statements: Obtain sufficient appropriate audit evidence to ensure compliance. Laws and regulations having no direct effect on Financial Statements: Undertake specified audit procedures to identify non-compliance. May have a significant impact on the functioning of the entity.

116 Compliance with Laws and Regulations.
Obtaining an Understanding of the Legal and Regulatory Framework Laws and Regulations having Direct Effect on Financials. Procedures to Identify Instances of Non-Compliance. Non-Compliance brought to the Internal Auditor’s Attention through Other Audit Procedures Written Representations Internal Audit Procedures When Non-Compliance is Not Identified or Suspected

117 Internal Audit Procedures When Non Compliance is Identified
Indications of Non-Compliance with Laws and Regulations Matters Relevant to the Internal Auditor’s Evaluation Evaluating the Implications of Non-Compliance

118 Reporting of non compliance
Reporting Non-Compliance to those Charged with Governance Reporting Non-Compliance in the Internal Auditor’s Report If precluded from obtaining sufficient appropriate audit evidence then Report the same. If unable to determine whether non-compliance is due to limitations imposed by the circumstances / management then evaluate the observations and findings in accordance with SIA 4.

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